Heads warn of school closures

Charity tax break defended against Labour's threat of changes, writes Lesley Gerard

Independent school heads warned yesterday that any move by a future Labour government to scrap the charitable status of private schools and phase out the assisted-places scheme could lead to school closures.

Dick Davison, deputy director of the Independent Schools Information Service, said Isis would meet Mr Blunkett to discuss what policies the Labour Party might implement. He defended schools' right to the charity tax break, claiming it dated back to the 17th century. Isis represents 1,350 schools, which educate about 80 per cent of the independent school population.

"Education has been recognised as having a legitimate claim to charitable status for centuries. Anyone who wants to change that will be embarking on a controversial policy which will involve unravelling complicated charity laws," he said.

Opponents of charitable status for independent schools argue that it is unfair to subsidise wealthier parents who can afford to educate their children privately. The law entitles such schools to tax relief on their business rates and interest earned fromendowments.

Mr Davison said: "Independent schools take their charitable status seriously. The fiscal benefits of charitable status are relatively insignificant when compared to the amounts that the schools pay out in assisted fees." He said independent schools received £42m tax relief in 1991, the most recent year for which figures were available, but paid £55m to subsidise fees.

Roy Chapman, head of Malvern College, said: "Any policy which would increase our fees would be a vote-loser. Families who place their children in private schools already pay income tax and poll tax. Trying to hike up our fees is a manifestly unjust policy.

Penelope Penney, head of Haberdashers' Aske's School in Elstree, said: "We are gravely concerned about any threat to assisted places. Our fees are less than £4,000 a year, but it is still a great deal of money for parents to find. Around 110 of our pupils are on assisted places. This policy increases access for lower-income families."

n A recent study by Isis showed that families on incomes below £20,000 with children in independent schools had dropped from 20 per cent to 14 per cent in the past five years, while those earning £40,000 or more had risen from 36 per cent to 54 per cent.